A global recession was likely in 2023, but pressures on food, energy and inflation might be peaking, the World Economic Forum (WEF) said on Monday in its Chief Economists’ Outlook Survey.

At the same time, some economies in the South Asia region, including Bangladesh and India, might benefit from global trends such as a diversification of manufacturing supply chains away from China, the report said.

The WEF said that globally businesses were expected to cut costs significantly in response to economic headwinds, but chief economists were optimistic about inflation and strong balance sheets.

A majority of the WEF’s community of chief economists expect to see geopolitical tensions continuing to shape the global economy and anticipate further monetary tightening in the US and Europe.

Almost two-thirds of chief economists believe that a global recession is likely in 2023; of which 18 per cent consider it extremely likely – more than twice as many as in the previous survey conducted in September 2022.

A third of respondents consider a global recession to be unlikely this year. There is, however, a strong consensus that the prospects for growth in 2023 are bleak, especially in Europe and the US.

“With two-thirds of chief economists expecting a world-wide recession in 2023, the global economy is in a precarious position. The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said.